General Motors Co (NYSE:GM) announced Thursday that it readjusted its EPS projection from $4.50 per share to between $5 and $5.50 per share this year. The announcement was a move to convince Wall Street that its recovery is gaining momentum as its margins and prospects for higher profits improve.
GM, the number one automaker in the U.S., stated that it will increase investor returns through stronger profit margins in North American and China. Share buybacks and operating efficiencies will also help improve returns.
During its annual presentation in Detroit, Michigan, the carmaker said it’saiming for pre-tax global margins between 9% and 10% by “early next decade.”
General Motors reported a 12% increase in U.S. sales for the month of September, but shares have fallen below $30, short of its offering of $33 per share during its initial public offering in 2010.
The company said that its revenue will be $155 billion this year with 6.8% global margins and a 24% return on invested capital.GM says that it will save $5.5 billion over the next three years through efficiencies in purchasing, manufacturing and administration. These adjustments will pay for investments in brand development and technology.
GM shares were up 1.8% on the news.